SALT LAKE CITY — Managing money can be challenging for many adults, and an even more difficult task is teaching financial literacy to their children, but a Utah-born financial planner has developed a solution that could help parents show their kids the basics of earning, saving and investing their hard-earned dollars.
As a certified financial planner, Gregg Murset, 43, understands the intricacies of prudent fiscal management. Having spent years helping clients in the Phoenix area, he saw firsthand how some families struggled to get kids interested in learning financial literacy and responsibility.
That understanding, along with his personal experience helped prompt the father of six kids to launch a platform called BusyKid — a mobile website that teaches kids how to work, earn some money and then make good financial decisions.
"Think of it as your kid's first job with direct deposit," he said. "What we're teaching is, 'Here's some chores, go do them, make some money.'"
Parents enroll in the platform for a $12 annual fee, and each week they receive a message detailing their child's completed work tasks and earnings that are placed in three categories — save, share and spend, Murset explained. Parents create a list of chores and determine how much each duty pays. The kids can only gain access to the bank account funds with the parents' permission. Each transaction must go through the parents' designated account for approval of transfer.
"We move the money from your linked checking account into our system automatically and then divide it up onto those three big buckets. That's exactly what all of us do as parents," he said. "This is literally teaching kids reality. This isn't an automatic allowance that shows up for doing nothing."
He said one of the goals of the platform is to educate children on the connection between working and earning money, then spending it.
The program was developed for kids ranging from 5 years old to 18 years old, he said, with adjustable models set up for children at every age.
"Imagine when (your kids) have to earn their own money by taking out the garbage and scooping up after the dog," he said. "Do you think they'll be all about the (expensive sneakers)? They might think twice about it!"
He noted that children tend to be more conservative when spending their own money than when their parents are paying the freight.
"That's the paradigm shift that we really want to stress and make happen in a kid's mind," Murset said. "That's where you start making an impact. That's where the lightbulb goes on and they start changing their spending habits based upon the connection between working and money."
The program also includes elements that help introduce kids to investing in the stock market, albeit on a novice level, he added. Money can be placed in the save bucket and designated to purchase whole or partial shares of stock.
"They just have to determine what stock to buy, and how much to spend on it," he explained. "In our system, they can literally buy fractional shares of (any stock). Now all of a sudden, they're thinking about (companies), the earnings report and stuff that would never even come onto their radar because now they own it."
Murset noted that most people learn the basic principles of investing through books in higher education or sometimes from their friends or relatives if they are lucky, but seldom do they have the chance to become educated through "hands-on" learning.
"That firsthand experience, there is nothing that takes its place," he said. "It's always better to learn something firsthand."
He said being able to learn about market fluctuations and the useful types of information that are involved in making investment decisions can be critical for young people to develop sound money-management skills that will serve them well throughout their lives. He said teaching kids good habits is essential to giving them the foundation for proper financial principles.
"We want the connection between working, getting money and then making good financial decisions to come together in an easy way," Murset said. Because so many transactions today are done electronically, kids seldom use actual currency to make purchases or receive money from their parents. This platform tries to instill a realistic view of virtual transactions, he noted.
"The whole concept is 'invisible money.' They don't see it. It's either a (gift or debit) card or nowadays you just grab your phone (to make transactions)," he explained. "Our kids are having way too many virtual experiences these days. They need to have some real experiences, which is taking out the garbage and washing the car (to earn money) and owning real stock."
Because the platform uses technology in a way familiar to kids, the learning process is easier to understand, he said, and, therefore, more effective.
"(Kids) learn so well when you use technology in the right way. You can use technology in a good way that's going to teach them good (principles)," he said. "It's a great conversation starter (for parents) and it's productive. It could totally change the trajectory of a kid's life if they can get those lessons dialed in early."